Ecosystems in a Sports Equipment Company - Case Study Under Armour
Today we invite you to take a look at the Ecosystem Strategy Map of a well-known sporting goods brand, Under Armour.
What do you think is the best way to understand business ecosystems?
I think the best way is to examine the ecosystem activities of companies. For this reason, today we will look at another example and will have a look at Under Armour.
Under Armour is an American sporting goods brand headquartered in Baltimore. Originally developed as a brand for martial arts clothing and thermal sports underwear and jerseys in sports such as baseball and basketball, Under Armour now also offers products such as leisure T-shirts, pants, shoes and caps.
Let's take a look at Under Armour with the help of the Ecosystem Strategy Map: Under Armour’s portfolio covers the Life Areas of Consumption, Work, Entertainment, Socialize, Health, Recreation and Education.
Let's go through each section of the Ecosystem Strategy Map:
Under Armour's main source of revenue is generated from their Direct-to-customer (DTC) and retail business of sports clothing, shoes and hardware.This includes e-commerce via the Under Armour app and physical stores. In return, the Under Armour app provides first-party data as feedback for Under Armour.
Partnerships with strategic wholesale partners contribute to the ecosystem by enabling long-term growth and a larger distribution footprint. Under Armour’s merchandise is sold in a number of U.S. department stores, specialty sporting goods stores and off-price retail locations, in addition to mom-and-pop businesses.
The Under Armour membership program offers rewards such as new gear or exclusive experiences for athletes, as well as a membership card. Members can sign up for free and earn points for their gear and workouts. They also have access to exclusive member perks such as special events, early access to select gear and promotions, training tips from experts, and birthday rewards. Points can be earned by purchasing equipment or completing qualifying fitness challenges on UA MapMyRun. These kinds of membership programs create continual touchpoints and incentives and finally lock-in effects to remain in the ecosystem.
Collaborations with premium brands like Palm Angels and celebrities such as actor Dwaine Johnson and basketball player Stephen Curry offer hype products in special collections.
Under Armour's Affiliate Program offers participants a commission for every click made on approved websites.
Recreation and Health
In partnership with FX Fitness, Under Armour offers Performance Centers. These are branded, state-of-the-art gyms that offer a variety of services such as personal training, group training and performance training in addition to regular fitness operations. They also include additional services such as hairdressing, physical therapy, spa and wellness centers. These offerings extend the user experience from the product to services and also create further lock-in effects.
Under Armour also offers apps like MapMyRun and MapMyFitness. They help athletes track their progress, improve performance and celebrate success together. MapMyFitness friends can detect peers who are in the same geographic area and will show them on the map while you record an activity, making it possible to share your achievements.
In the Life Area health, the range of connected products includes smart footwear such as the UA connected running shoe collection, which records running data and synchronizes it to the MapMyRun and MapMyFitness App. Under Armour also offers wireless headphones designed by JBL that record heart rate during workouts. All these initiatives pay into the ambition to gain relevant user data and find out more about the needs of the customers.
Earlier this year, Under Armour announced its exclusive partnership as technical spacewear provider for Virgin Galactic. In that so-called best-in-class partnership Under Armour developed special space suits for Virgin Galactics' space tourists for the first commercial space flight.
AR gaming is the integration of visual and audio game content with the user's environment in real time, a trend that Under Armour is also taking advantage of. Developed in collaboration with Snapchat and NFL player Cam Newton, the It Comes From Below game is available to Snapchat users in the U.S. and Canada, who can play by swiping up on ads or on Snapchat Discover.
Previous projects have included the Under Armour and U.S. Army All American Football Team VR Experience from 2017.
Finally, hosting their own sporting events and sponsoring professional athletes and sports clubs helps individuals and companies alike stage major events.
Education and Social
Community events such as running groups are supported by UA's International Fellowship. Sports groups connect people and promote engagement.
Several partnerships with nonprofit organizations across the U.S. promote engagement and change. For example, Donors Choose empowers public school teachers from across the USA to request much-needed materials for their students, while MENTOR promotes the quality and quantity of mentoring relationships for America's youth, closing the mentoring gap for one in three youth growing up without this vital support.
In summary, Under Armour is a prime example of a comprehensive ecosystem that extends its offering portfolio beyond its core products with a variety of integrated services and solutions. This holistic and human-centered approach and focus to customer experience creates lock-in effects that in turn drive the innovation flywheel. This enables Under Armour to identify people's needs and adapt its products and services accordingly.
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